According to the latest quarterly research report from Huttons Asia, the shophouse market has been relatively quiet in 2024 with only 84 caveated transactions recorded. This number is significantly lower than the yearly average of 200 shophouse deals between 1995 and 2023.
Huttons Asia’s senior director of data analytics, Lee Sze Teck, notes that many buyers did not lodge a caveat, indicating that the number of shophouse deals in 2024 is most likely the lowest since 1998.
The total value of the 84 caveated shophouse transactions in 2024 was $683.6 million, a decrease of 38.9% from the $1.1 billion recorded in the previous year. However, there were also a number of substantial shophouse deals on properties such as Amoy Street, Neil Road, North Bridge Road, and Telok Ayer Street, which were not caveated. Lee estimates that these deals were sold for more than $200 million.
The largest shophouse deal in 2024 was the divestment of The Rail Mall by Paragon REIT for $78.5 million in June. This is likely to be the largest shophouse deal on record, surpassing the previous high of $74.8 million for a row of shophouses on Jalan Sultan in March 2022.
The Rail Mall shophouses were valued at $62 million as of December 2023, indicating a gain of approximately $16.5 million on the sale. Most of the shophouse transactions in 2024 were at smaller quantums, with over half of the caveated deals valued at $5 million to $15 million.
District 8 accounted for almost half of the shophouse transactions in 2024, which Lee attributes to its desirable city-fringe location and lower prices compared to Districts 1 and 2.
In terms of rents, shophouse prices have moderated for a second consecutive quarter, with a 2.6% decline to $6.47 psf per month in 4Q2024. However, for the entire year, shophouse rents were up by 1.7%.